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ConcludedRan 10 daysin the edition since 21 Oct 202612 sourcesupdated 30 Oct 2026

Anthropic Reports 90, 99% Drop in Distillation After New Defenses

The gist

CISA and Anthropic's own disclosures document industrial-scale extraction of proprietary US model capabilities by multiple Chinese labs, raising questions about how much competitive AI development depends on distillation rather than independent research. The effectiveness of Anthropic's countermeasures, and the apparent shift of distillation activity to other targets, shows the problem is active and not contained to one company.

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The full picture

Anthropic published a report on October 12, 2026 describing its defenses against distillation attacks, in which third parties harvest large volumes of Claude outputs to train competing models. The company said its countermeasures, including tighter account limits, proxy-network blocks, and a new 'preserved thinking' feature introduced with Claude Fable 5.1 and Claude Opus 5.5, cut data harvested from Claude by 90% to 99%. Preserved thinking prevents API accounts created on or after August 31, 2026 from editing Claude's prior context, making proxy-network extraction harder. Anthropic also blocked specific extraction techniques, such as asking Claude to translate its reasoning into another language or write it out in special tags, and prevented newer models' reasoning from being read by older models with weaker anti-distillation safeguards. The company said it has turned away meaningful revenue and trillions of tokens of paying traffic from suspected distillers. Following Anthropic's measures, Chinese labs reportedly redirected distillation efforts toward OpenAI's GPT-6 Astra, according to The Information. CISA separately documented that multiple China-based AI companies, including StepFun, Z.AI, and Alibaba, conducted systematic distillation of Claude and GPT product lines between late 2025 and mid-2026. Anthropic and OpenAI, along with Google DeepMind, have been sharing threat intelligence through the Frontier Model Forum to coordinate responses. In July 2026, the White House accused Moonshot AI specifically of using an internal distillation platform against Claude Fable 5, a claim Moonshot employees and outside experts publicly disputed as politically motivated and technically implausible given the timeline.

How it developed
30 October 2026

Meta published WM-Basin watermark detection technique showing distilled models retain key-specific traces

29 October 2026

Chinese labs reportedly shifted distillation activity from Claude to OpenAI's GPT-6 Astra following Anthropic's countermeasures

26 October 2026

CSET published technical explainer on black-box distillation, noting US companies lack visibility into how much distilled data is used

22 October 2026

IFP estimated adversarial distillation halves US compute lead over China from 13 to roughly 6.5 months

First in the edition · 21 October 2026
12 October 2026

Anthropic published report on distillation defenses, saying countermeasures cut harvested data by 90, 99%

23 July 2026

White House accused Moonshot AI of distilling Claude Fable 5 during Kimi K3 development; experts and Moonshot disputed the claim

7 April 2026

OpenAI, Anthropic, and Google DeepMind began sharing distillation threat intelligence via the Frontier Model Forum

Sources
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